Another Top-10 List — America’s Healthiest Housing Markets

Yesterday Fannie Mae released the findings of their January 2017 Home Purchase Sentiment Index which reported that American’s have never felt better or more confident than ever regarding U.S. housing markets. That said, it’s once again time to invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market. Nor is there consistent nationwide health in housing. Cities expanding jobs and population no doubt have more robust and healthier housing markets than those losing jobs.

So what makes up a healthy housing market and where are the healthiest of all? Keys to a healthy housing market for smartasset™ were that homeowners should be able to easily sell their homes and have a low risk of losing money in their home over time.

To address these, smartasset focused on Stability, Affordability, Fluidity and Risk of Loss. They utilized the following metrics to gauge these (with the weighting of each in parenthesis). They calculated these data for all of the top 500 counties and cities.

  • Stability (20%) was measured using two equal weighted indicators – the number of years that people remain in their homes and the percentage of homeowners with negative equity
  • Risk (20%) was measured by the percentage of homes with negative equity (greater probability to enter foreclosure)
  • Fluidity (20%) proxy was the average time a listing was on the market – the greater the time, the less fluid the market
  • Affordability (40%) was the monthly cost of owning a home as a percentage of household income

So what were smartasset’s findings based on these metrics?

3-8-17a table

 

Was surprised that Northridge, Ohio was included in the list with 12 percent of their homes decreasing in value. Ditto Bethel Park, Pennsylvania and Forest Hills, Michigan. Also do not believe that the average days on market is correct – at least for the U.S. The National Association of Realtors® (NAR) reported that existing housing sales in January 2017 were on the market for an average 50 days, with 38 percent on the market for less than one month.

I think of Austin, Texas, which has had dynamic market over recent years and why they are not included in these results. Perhaps it is because most of the top-ranked cities are older with limited mobility – hence the extended tenure. It’s also too expensive of a housing market.

To read the entire smartasset study on America’s Healthiest Housing Markets click https://smartasset.com/mortgage/mortgage-calculator?year=2017#map You can hover over a state to view those ranked cities and counties.

To learn more about Fannie Mae’s Home Purchase Sentiment Index click http://fanniemae.com/portal/research-insights/surveys/about-national-housing-survey.html

Do these findings correspond to the metrics I would use? Some yes, but I have less than total faith in the accuracy of the underlying data.

Just my two cents.

Ted

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